565/1 Business Studies Paper 1

NAME ______INDEX NO. ______SCHOOL ______SIGNATURE ______DATE ______

565/1 BUSINESS STUDIES PAPER 1 July/August, 2015. TIME: 2 HOURS

565/1 BUSINESS STUDIES PAPER 1 TIME: 2 HOURS

INSTRUCTIONS TO CANDIDATES a) Write your name, school and index number in the spaces provided above. b) Sign and write the date of examination in the space provided above. c) Answer ALL the questions. d) ALL answers must be written in the spaces provided in this booklet. e) Do not remove any pages from this booklet. f) This paper consists of 7 printed pages. g) Candidates should check the question paper to ascertain that all the pages are printed as indicated and that no questions are missing.

FOR EXAMINER’S USE ONLY Question 1 2 3 4 5 6 7 8 9 10 11 12 13 Marks

Question 14 15 16 17 18 19 20 21 22 23 24 25 Marks Grand Total

©2015, Mutomo Sub-County KCSE Pacesetter Turn Over 565/1 Business Studies Paper 1 1. Highlight four measures which a firm may take to improve its human resource productivity. (4 marks) a) ______b) ______c) ______d) ______

2. Give four causes of cost-push inflation. (4 marks) a) ______b) ______c) ______d) ______

3. Outline four reasons why choice is inevitable in the satisfaction of human wants. (4 marks) a) ______b) ______c) ______d) ______

4. State three injections into the circular flow of income. (3 marks) a) ______b) ______c) ______

5. Highlight four disadvantages of sirens as a means of communication. (4 marks) a) ______b) ______c) ______d) ______

6. In the spaces provided write decrease, increase or no effect to show the effects of each one of the following transactions on the assets, liabilities and capital. Transaction Assets Liabilities Capital a) Bought furniture on credit b) Paid creditors by cash c) Withdrew goods for personal use d) Converted a personal motor cycle for business use (4 marks) 7. Mention four benefits that accrue to a customer who buys goods directly from a manufacturer.(4 marks) a) ______

8. Mjengo Traders had the following assets and liabilities as at January 2014. Furniture and equipment 350,000 Debtors 45,000 Stock 25,000 Cash 7,500 Creditors 48,000 i) Additional capital introduced during the year was Ksh 24,000 ii) Drawings made during the year were Ksh 20,000 iii) Net profit was Ksh 34,500 Determine the capital as at 31.12.2014. (4 marks)

9. Mutua and four other people are in partnership business. They would want to convert their business into a private limited company. Give four advantages they would derive from this form of business. (4 marks) a) ______b) ______c) ______d) ______

from D0D0 to D1D1.

State four possible causes of this shift. (4 marks) a) ______b) ______c) ______d) ______

11. Study the cash book below and answer the questions that follow: Date Details Cash Bank Date Details Cash Bank Jan 1 Bal b/d 2,500 4,500 Jan 2 Stationery 3,200 Jan 5 Sales 2,200 10,000 Jan 8 Wages 12,400 Jan 10 Cash 1,500 Jan 10 Bank 1,500

a) Balance the cash book as at 11.1.014. (1 mark) b) State the transactions that took place on: (4 marks) i) 5.1.014 ______ii) 8.1.014 ______iii) 10.1.014 ______iv) State the name used to refer to the entry on 10.1.014 ______12. Highlight four factors that may account for high population growth rate in Kenya. (4 marks) a) ______

13. Outline four features of economic development in a country. (4 marks) a) ______b) ______c) ______d) ______

14. Highlight four monetary tools used by the Central Bank to control activities of commercial banks. (4 marks) a) ______b) ______c) ______d) ______

15. State four benefits of M-pesa as a means of remitting money. (4 marks) a) ______b) ______c) ______d) ______

16. Give four reasons why Kenya should use methods of production that rely more on labour than machinery. (4 marks) a) ______b) ______c) ______d) ______

17. Name four sources of energy which are environmentally friendly. (4 marks) a) ______b) ______c) ______d) ______

©2015, Mutomo Sub-County KCSE Pacesetter 5 565/1 Business Studies Paper 1 18. Give four measures a country can take to correct balance of payments deficit. (4 marks) a) ______b) ______c) ______d) ______

19. The following information was obtained from the books of Lulu Traders on 31/12/2012.

Kshs Purchases 1,350,000 Opening stock 170,000 Gross profit 200,000 Margin 20%

Calculate: a) Cost of sales (2 marks)

b) Closing stock (2 marks)

20. Outline four reasons why a cheque may be dishonored . (4 marks) a) ______b) ______c) ______d) ______21. State four characteristics which distinguish a public company from a partnership. (4 marks)

22. Mention four circumstances under which a firm can use competitive advertising. (4 marks a) ______b) ______c) ______d) ______

23. Highlight four channels of distribution for imported motor vehicles into Kenya. (4 marks) a) ______b) ______c) ______d) ______

24. The following is a list of source documents. Indicate the book of original entry related to each document. Document Book of original entry a) Incoming invoice b) Outgoing credit note c) Payment voucher for purchases of postage d) Outgoing receipts (4 marks) 25. Outline four reasons for imposition of taxes by the government. (4 marks) a) ______b) ______c) ______d) ______